Big business groups are calling for the creation of a federal pandemic insurance program to backstop insurers along the lines of the terrorism risk program enacted after the 9/11 attacks.
“When businesses couldn’t obtain coverage for acts of terrorism after 9/11, Congress stepped in,” National Retail Federation Senior Vice President David French said Tuesday. “It’s time for Washington to do the same for pandemics.”
“A federal program could also provide a mechanism for immediate and predictable economic recovery should the nation face another pandemic, even one of lesser magnitude, in the future,” French said.
Rep. Carolyn Maloney, a New York Democrat, is working to introduce legislation (named the Pandemic Risk Insurance Act) aimed at rebuilding business confidence and security for future pandemics.
The Retail Federation and 16 other business associations, including those that represent a large share of the real estate, hotels, and restaurants nationally, sent a letter to Congress endorsing the Pandemic Risk Insurance Act. A similar bill is also planned by Housing, Community Development and Insurance Subcommittee Chairman William Lacy Clay, a Missouri Democrat.
Retailers and other businesses across the country have seen unprecedented losses related to the coronavirus pandemic that weren’t covered under most current insurance policies and won’t be covered if there’s a second wave of the virus later this year.
The business associations said that a federal pandemic insurance program would give businesses “the certainty that they need to renew leases, invest in real estate, order inventory, plan for capital improvements, and hire and re-hire workers in the coming months.”
House Democrats have already introduced legislation to force insurance companies to cover business interruption losses generated by the pandemic, an effort to have the federal government settle a roiling debate in favor of companies over insurers.
The insurance industry has pushed back against such legislation. It argues that it never took on the risk for the pandemic and that if insurance companies were forced to pay for uncovered coronavirus-related business losses, they would be unable to pay for losses from disasters, such as tornadoes, hurricanes, and wildfires that are covered.
